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Take a pioneering spirit, add a thirst for success and a dose of teamwork and there's Roy Spence's formula for a winning agency/client relationship.

Mr. Spence, the 45-year-old president of GSD&M in Austin, Texas, likes to think big but act small. His latest innovation involves reshaping the $210 million agency into three business units, each essentially run as separate companies within the shop, to "fight the bigness disease," he says.

It's a bold step to reinvigorate the shop, which Mr. Spence and five fellow University of Texas graduates started 23 years ago with no money, no clients and no experience. The agency has long since come of age; clients include Wal-Mart Stores, Southwest Airlines, Coors Brewing Co. and the Texas Lottery.

In the last four months, these and GSD&M's 20-plus accounts have been assigned to one of the three business units. Each leadership team is made up of about 10 agency people from the creative, account service, media and financial side-along with a top senior executive like Mr. Spence.

These units, each with about $70 million in billings, are run like individual companies. In every team meeting, three questions are asked:

Is the agency building the client's business and what do results show?

Is the client building the agency's business?

Is the agency proud of the creative product?

"We're concentrating on the thrill of entrepreneurship because the ad industry is bloated with bureaucrats," Mr. Spence says.

For clients, the new business-unit concept gives them the added benefit of expertise from agency leaders who don't work on their account (an individual, traditional account team is still assigned to each).

Though the business unit concept is in its first year, Mr. Spence believes the new setup will succeed because it replicates the agency's original entrepreneurial partnership, empowers employees and fosters healthy competition between the three units.

A new incentive program is based on the business unit's financial performance.

"Most people compete on whose career is going better. We want people competing on whose company [business unit] is doing better," Mr. Spence says.

By reshaping the agency to fight the perils of "bigness," Mr. Spence envisions an agency twice as big-with $500 million in billings-that acts like a $70 million shop.

As the agency grows, business units will be added.

This plan is just the latest innovation from Mr. Spence. He earlier created boards for each client group; he initiated the industry's Green Marketing Task Force; and he recommended the town meeting concept to President Clinton, a longtime friend, during his presidential bid.

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